Protectionist Breezes: Wind-Power Companies Cry Foul on China

By

Keith Johnson

May 28, 2009 12:02 pm ET

There is an ugly side to China’s headlong rush into clean energy: Protectionism.

Foreign firms complain that China’s quest for a domestic clean-energy industry is coming at their expense. European and U.S. wind-turbine makers, in particular, say they are being squeezed out of one of the world’s fastest-growing wind-power markets because of discriminatory rules for bidding on power projects. Here’s the European discontent:

“All the foreigners are out of the race,” Jorg Wuttke, the [European Union Chamber of Commerce in China’s] president, said at a media briefing in Beijing today. “There seems to be a drive by the central government to award this to Chinese and not Europeans established in China.”

In a nutshell, rules for getting a piece of the $7 billion wind-energy part of the Chinese stimulus all boil down to the cost of wind turbines—not factors such as equipment reliability or the total cost of generating clean electricity. That favors Chinese makers and punishes foreign companies such as General Electric, Vestas, and Gamesa, Mr. Wuttke said.

This isn’t the first time foreign companies have complained about China’s often Byzantine rules for bidding on public projects…